Kerry Underwood

NEWS AND CASE ROUND-UP


As the title suggests this blog is a round-up of recent news and cases.

There is a theme running through many of the recent cases, and that is the courts reclaiming the streets.

I have reported elsewhere and in detail the landmark decision of the Supreme Court in the Employment Tribunal fees case – SUPREME COURT: FRIENDS OF THE PEOPLE.

In this round-up the Supreme Court upholds a debarring order against HMRC with Lord Neuberger, President of the Supreme Court, saying that higher, and not lower, standards are expected of public bodies.

The Court of Appeal severely criticises the First-tier Tribunal in its approach to immigration cases and the Upper Tribunal holds that the Department for Work and Pensions is illegally blocking access to the courts.

I will report elsewhere the President of the Supreme Court’s warning that the United Kingdom faces the serious risk of the rule of law being lost altogether and saying that the conduct of United Kingdom governments “has faint echoes of the familiar and depressing sight of repressive totalitarian regimes producing wonderful constitutions and then ignoring them”.

I see a major constitutional clash between the courts and governments coming.

TRIBUNALS AND DEBARRING ORDERS: A SUPREME COURT DECISION

In BPP Holdings Limited & others v Commissioners for Her Majesty’s Revenue and Customs [2007] UKSC 55

the Supreme Court held that the First-tier Tribunal was entitled to make a debarring order – here preventing HMRC from defending an appeal concerning liability for VAT on the supply of books to students.

The debarring order was allowed for in the tribunal’s own procedural rules.

Although the cases on time limits and sanctions in the Civil Procedure Rules do not apply directly, tribunals should generally follow a similar approach.

Here, HMRC also argued that the court should take into account that the debarring order prevented HMRC from discharging its public duty, leading to the public interest being harmed in that VAT which should be paid may not be recovered.

Lord Neuberger, President of the Supreme Court, dismissed that notion in clear terms:

“30. … I consider that it would set a dangerous precedent if that point were accepted, as it would discourage public bodies from living up to the standards expected of individuals and private bodies in the conduct of litigation. It seems to me that there is at least as strong an argument for saying that the courts should expect higher standards from public bodies than from private bodies or individuals. … there is no good reason to have different rules for public law cases.”

The Supreme Court suggested that the rules in tribunals might be changed to allow additional powers of sanction rather than the tribunal having a choice of making a debarring order or doing nothing.

The Supreme Court pointed out that the judge

“was faced with a binary question, involving two unpalatable choices .Making the debarring order, which she described as draconian, or not making the order, which, to use the vernacular, would have meant that HMRC effectively would have got away with it. There may be force in the notion that the tribunal rules should provide for the possibility of more nuanced sanctions, such as a fine or even the imposition of some procedural advantage. Experience suggests that such ideas, while attractive in theory can often be difficult to formulate or to apply satisfactorily in practice, so I mention the point with some diffidence.” (Paragraph 35).

 

FREEZING ORDERS AND SOURCE OF FUNDING

In JSC Mezhdunarodniy Promyshlenniy Bank and another v Pugachev and others [2017] EWHC 1847 (Ch)

the court has made an order requiring the defendant (P), who was subject to a worldwide freezing order, to disclose the source of his legal funding. It held that it was appropriate to require P to provide the information as a condition of him being allowed to proceed with an application to challenge the court’s jurisdiction.

The issue arose in the context of enforcement proceedings by the claimant (C) in respect of a Russian judgment it had obtained against P for approximately £1 billion. P applied to set aside the default judgment against him, and challenged the jurisdiction of the English court. In response, C submitted that the court should impose certain conditions which must be complied with before P’s jurisdiction challenge could be heard, in particular requiring P to pay £35,000 into court, and to file an affidavit setting out ultimately who was providing the money being used to fund his legal expenses in connection with the application, and where that person obtained the money from.

The decision is an interesting, and apparently novel, example of the court making such an order in these circumstances. The judge noted that this was an unusual case, in view of the fact that the defendant had previously been found to be in serious breach of numerous court orders and had failed to serve a two-year prison sentence for contempt of court. However, the decision illustrates that the court will be prepared, in an appropriate case, to require a defendant who is subject to a worldwide freezing order to disclose the source of his legal funding before proceeding with an application, including an application challenging the court’s jurisdiction

 

EMPLOYMENT IN THE LEGAL SECTOR

370,000 people are employed in private legal practice in the United Kingdom, two thirds of whom are based outside London, which still leaves a staggering 124,000 in London.

Source: The Strength of English law and the UK Jurisdiction: Judicial Office, paragraph 9.

 

JUDICIAL REVIEW: UNITED NATIONS TO CRITICISE UK

The United Nations Economic Commission for Europe, which is nothing to do with the European Union, has prepared a draft decision expressing concern at the slow progress of the United Kingdom in establishing a costs system fulfilling its 1998 Aarhus Convention obligations to provide procedures that are fair, equitable, timely and not prohibitively expensive.

This applies to judicial review procedures in relation to environmental matters.

The draft decision requests the United Kingdom:

“To, as a matter of urgency, take the necessary legislative, regulatory, administrative and practical measures to ensure that the allocation of costs in all court procedures [subject to the convention] is fair and equitable and not prohibitively expensive”.

In his Fixed Costs Report, published on 31 July 2017, Lord Justice Jackson called for the existing capped costs scheme in this country for Aarhus Convention matters to be adopted for all judicial review cases.

 

IMMIGRATION TRIBUNAL SLAMMED BY COURT OF APPEAL

In AM (Afghanistan) v Secretary of State for the Home Department

the Senior President of Tribunals found the First-tier Tribunal had failed to take account of an Afghan boy’s age, vulnerability and learning difficulties.

AM claimed asylum in 2012 but his application was rejected by the then Home Secretary Theresa May in 2013.

AM was 15 at the time and was granted leave to remain in the UK until his 17th birthday.

Reasons for refusing his application for asylum included inconsistencies in his evidence and the fact that he had not demonstrated a risk to his life.

AM appealed to the Court of Appeal who said that the First-tier Tribunal’s response to a psychological report was “wholly inadequate.”

The Court of Appeal sent the matter back to the First-tier Tribunal and said that tribunals should “closely consider whether oral evidence is necessary at all” and whether requiring oral evidence might prevent there being a fair hearing.

Even if there were discrepancies in the evidence, tribunals should consider the extent to which the age, vulnerability or sensitivity of the witness was an element in those discrepancies.

It pointed out that tribunals have the power to appoint a Litigation Friend where access to justice requires it.

 

PERSONAL INJURY CLAIMS MANAGEMENT COMPANY NUMBERS DROPPING

The Claims Management Regulator, in its annual report published in August 2017 said that the turnover for Claims Management Companies in the personal injury field fell by 15% to £182 million in 2016/17, and this is down from a figure of over £300 million in 2014/15.

Applications from businesses seeking to become Claims Management Companies in the personal injury field dropped by 40% in 2016/17.

The number of authorised personal injury Claims Management Companies is now 762, down from 979 in 2015.

 

COMMERCIAL COURT: ONLY 28% OF USERS ARE FROM THE UK 

Just 121 cases were brought by UK litigants in the Commercial Court in England and Wales in 2016/17, amounting to just 28% of the total.

Comment

Is it not time to consider closing this court and diverting its resources, that is its judges and court buildings etc. to delivering justice for ordinary people in England and Wales?

No doubt the accountants and economists and hard-line capitalists will point out the invisible earnings that they bring into England and Wales.

What they will not point out is the increasingly visible damage that providing access to justice only to rich people is doing to this country.

 

DEPARTMENT FOR WORK AND PENSIONS ILLEGALLY BLOCKING ACCESS TO THE COURTS   

On 4 August 2017 the Upper Tribunal held that the Department for Work and Pensions had been unlawfully preventing people who had been refused social security benefits from going to tribunals to challenge the decision.

The Upper Tribunal criticised the DWP’s policy of denying Claimants an appeal if they failed to act within a month, saying that it was obvious that there would be a risk that people with good claims would miss the deadline as many of them were vulnerable.

Since 2013 any Claimant wishing to challenge a decision to refuse benefits has had to apply for a “mandatory reconsideration” before appealing to an independent tribunal.

Where the mandatory reconsideration application is made out of time, there is no right of appeal to the tribunal.

This case was brought by the Child Poverty Action Group (CPAG) on behalf of two Claimants, both of whom have mental health problems and who were denied benefits and were deemed to have failed to ask for a review in time.

CPAG claimed that the policy excluded large numbers of Claimants from the justice system and the tribunal said that this policy had resulted “in a significant number of Claimants who are entitled to benefits not being paid them”.

The tribunal, presided over by a High Court Judge, said that the DWP was improperly making itself “gatekeeper to the independent tribunal system.”

The Upper Tribunal said that the correct position was that where a Claimant made a mandatory reconsideration request at any time within 13 months of the original decision, they will, if dissatisfied, be entitled to pursue the challenge to a tribunal.

The government had argued that there was no need to have access to the tribunal because its decisions on late mandatory reconsideration requests could be challenged by judicial review.

The Upper Tribunal pointed out that not one of the 1,544,805 mandatory reconsideration decisions by the government since 2013 have been challenged by way of judicial review.

Comment

The decisions reported in this round-up are part and parcel of the same, enormously welcome, decision by the Supreme Court in R (on the application of UNISON) v Lord Chancellor [2017] UKSC 51 whereby the courts are taking a view that it is for the courts, and not Parliament, to decide on how access to the courts is to operate.

 

AMENDING CLAIM IN PRE-APRIL 2013 CFA CASE

In Mawer (Trustee in Bankruptcy of James Moore) v Mawer, Unreported, Companies Court, 7 April 2017

the High Court refused to make the Grant of Permission to amend a claim subject to a proviso that a pre-1 April 2013 Conditional Fee Agreement, with a pre-1 April 2013 After the Event insurance premium, would not apply to the amended claim and thus there would be no recoverability.

The judge held that the questions of what costs are recoverable under the Conditional Fee Agreement should be determined at the end of the litigation and the Conditional Fee Agreement should not “disrupt the flow of the litigation.”

 

EXCEEDING COSTS CAP IN COMPETITION APPEAL TRIBUNAL

In Socrates Training Ltd v Law Society of England and Wales [2017] CAT 12

the Competition Appeal Tribunal published its costs ruling.

As the case was conducted under the fast-track procedure, the Competition Appeal Tribunal had imposed a cap on costs and the Law Society had conceded that Socrates Training Limited should have its costs on the standard basis up to the capped maximum of £230,000.00.

However Socrates Training Limited claimed that its costs should be assisted on the indemnity basis and thus should not be subject to the cap.

The Competition Appeal Tribunal accepted that in the circumstances of the case, and with regard to the Law Society’s conduct of the proceedings, there were no grounds for an Indemnity Costs Order.

The Law Society’s conduct had not caused such a serious increase in costs that it materially changed the position so as to justify allowing additional costs over and above the amount of the cap.

However the Competition Appeal Tribunal appear to accept that had the conduct warranted indemnity costs then the cap could have been exceeded.

 

WITHDRAWING ADMISSIONS

In Blake v Croasdale [2017] EWHC 1336 (QB)

the Queen’s Bench Division of the High Court held that an admission by insurers was binding, but on the facts gave permission to them to resile from that admission.

Here the Claimant was seriously injured in a road traffic accident and the claim was submitted on the RTA Portal.

The Defendant stated that it might be alleging contributory negligence in relation to matters other than failure to wear a seatbelt and that the case was unsuitable for the portal because of its value, but they admitted primary liability.

When proceedings were issued the Defendant filed a Defence denying liability and including an allegation that the Claimant’s injury was caused by his own criminal act, asserting that at the time of the accident he was acting in the course of a joint criminal enterprise with the First Defendant, namely dealing in drugs.

There was sufficient evidence in support of that allegation that it would not be struck out on the usual principles.

The court also took into account the fact that a claim initially issued on the portal, and therefore valued at no more than £25,000.00, was now a multimillion pound claim.

That could be interpreted as meaning that a Defendant will be entitled to resile from an admission on that ground alone.

However in Wood v Days Health UK Limited and Others [2016] EWHC 1079 (QB) the court said:

“It is true that the potential value of C’s claim has increased since 2010; and that is the real ground for the application. But that is a risk which is inherent in any personal injuries claim, and is a reason why it can sometimes be commercially advantageous to try and settle a claim at an early stage. …  I do not consider that the fact that the potential value of the claim has increased since the admission is a good reason for allowing D1 to withdraw the admission.”

Comment

There is still considerable uncertainty in the law relating to admissions and withdrawing admissions.

In the absence of fraud or fundamental dishonesty or whatever it is hard to see why a party should be allowed to withdraw an admission, especially if that admission was made having received professional advice.

Advertisements

Written by kerryunderwood

August 8, 2017 at 10:47 am

Posted in Uncategorized

%d bloggers like this: